Wells Fargo's profits fell short of analyst expectations, driven by higher expenses linked to severance payments. The company's stock experienced its largest intraday decline in six months.

The bank allocated $612 million for severance fees, a move that is part of a broader cost-cutting initiative. According to a statement released on Wednesday, actual expenses reached $13.7 billion, surpassing the $13.6 billion forecast by analysts in a survey.

"Despite numerous constraints, we have established a solid foundation and made significant strides in enhancing growth and returns," CEO Charlie Scharf stated in the release. "We are pleased to now be competing on a level playing field."

Fourth-quarter net interest income was $12.3 billion, missing the analyst forecast of $12.4 billion. This figure represents the primary profit driver for the lending business. This brought the full-year net interest income to $47.5 billion, aligning closely with the bank's previous guidance that 2025 net interest income would be roughly consistent with 2024 levels.

The fourth-largest U.S. bank projected its 2025 net income to reach $21.3 billion, whereas analysts had previously anticipated $21.6 billion.

Having climbed 25% over the past 12 months, the company's shares nonetheless tumbled as much as 5.8% by 11:46 a.m. in New York, marking the most significant intraday drop since July 15th.